The electric car maker, whose stock has soared 145 percent so far this year and now boasts a market value of nearly $10 billion, hit a speed bump last week after the Senate Commerce Committee in North Carolina unanimously approved a plan that would essentially stop direct-to-consumer sales of Tesla vehicles in the state.

The measure, backed by the North Carolina Automobile Dealers Association, would make it a requirement to sell automobiles through third-party dealerships. It would also prevent manufacturers from selling vehicles in the state over the Internet. That would cut at the heart of Tesla’s direct sales approach, and would be harsher than other states such as Texas and Arizona where the car maker faces similar legislative bottlenecks.

Slate pointed out the irony of it all, noting that “North Carolina doesn’t seem to have a problem with Apple selling its computers online or via its own Apple Stores.”

It was with that backdrop this evening that George Blankenship, the charismatic former Apple retail executive who now serves as vice president of sales and ownership experience at Tesla, arrived in Seattle for a cocktail reception hosted by wealth management firm McAdams Wright Ragen.

Blankenship had some fascinating comparisons to make between Tesla and Apple. (I’ll get to that in a follow-up post).

But I also got a chance to ask Blankenship about his thoughts on the legislation now making its way through North Carolina. Here’s what he had to say, noting that they’ve opened stores in both Arizona and Texas where similar legislation exists.

“We believe firmly that being a good citizen is as important to us as sales and customers. So, what we do, we work with the state, we work with the county, we work with the city and we work with the DMV in every single state where we are open, and we do whatever they say we need to do. So, in Texas, we can’t sell cars. So, we opened up a gallery that looks just like Bellevue, and we fill it with employees, just like in Bellevue. And we have customers come in and ask us all of the same questions, and we answer all the questions for them. We just can’t talk to people about price, and we can’t sell them a car. So, they go to TeslaMotors.com and they buy a car out of California.

So, we believe in being good citizens. If we can’t sell cars in Texas, we will … sell them in California. But the good news, from our standpoint, is that most of the big states — California, New York, Washington, New Jersey, Florida, Illinois — we have licenses. So, it is not an issue. We don’t see it as an issue. Do we wish that it wasn’t happening? Sure. It would be better if it wasn’t happening…. It’s an inconvenience.”

It does seem to be an inconvenience. Tesla reached profitability for the first time in its 10-year history during the first quarter, posting record sales of $562 million as it delivered a better-than-expected 4,900 vehicles.

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Comments

Guest

Car dealers deserve disruption. Kudos to Tesla for taking the high road against anticompetitive cabals.

Stick to your principles, eh?

Fortunately, Republicans have a strong majority in the NC Senate and House. So there’s no way they will let those anti-free-market liberal politicians get away with this. There must be some mistake though. The bill is allegedly sponsored by a Republican and was passed unanimously by the committee which would falsely imply that Republicans voted for it. Damn that liberal media bias.

squakmtn

What great irony that the party of firm values and convictions have strickly situational values when money is involved. The free market reigns…as long as it lines MY pocket.

jrs505050

think about it, if the whole nation put laws in place so that we have requirements that things are sold through 3rd party and 4th party and 5th party merchants, then we would have more jobs and we’d all be millionaires. I’m glad there are some SMART people in North Carolina. We need this system for Computers, Books, Food, Homes, Furniture, Restaurants, etc. I am a third party automobile dealer and I support MORE JOBS FOR EVERYONE.

http://twitter.com/questionsall Carl Setzer

I’m not convinced adding needless layers in transactions is the most effective route for job creation.

olanmills

You missed the sarcasm.

Or did I miss the sarcasm on top of the sarcasm?

Ranjit Cordeiro

Nice to see your sarcasm here too Olanmills

Graham Radetsky

Wouldn’t this just lead to inflation of cost for goods, the extra money made is not profit, its just making products more expensive with nothing in return. Yeah you might be making money with the jobs but everything else in relation will become equally more expensive to support everyone else who takes on these types of jobs. A job that is actually beneficial to the company for a purpose will give the company product and allow them to support you through their profits, not through the consumers.

Ranjit Cordeiro

Go to Europe and see the answer to your question!

PunchingBag

I am in Europe. The idea of forcing customers to go through intermediaries looks very weird from over here. I actually think we ended up with your “free” markets, while you evolved it into “special interest markets”.

http://www.facebook.com/profile.php?id=500022571 Grant Neckermann

Planet Money did a great podcast on the direct to consumer vs. dealership model a couple of months ago. It’s the ultimate in good ol’ boy politics. Looking forward to seeing Tesla continue to break down the walls. They do sell sexy machines…

North Carolina, Arizona, and Texas…so three states that are predominantly conservative, a political philosophy that claims to believe in the free market, don’t actually believe in the free market after all?

Scott Sanford

As a conservative, true free-market capitalist and Tesla owner-to-be I’m shocked that they would setup such roadblocks…

More and more I’m beginning to feel that the issues with the United States aren’t Republican vs. Democrat, but rather Rulling Class vs. the Ruled….

Ranjit Cordeiro

No it’s the Suckers vs the SUCKERS(blood suckers). And I am a card carrying Republican.

Sustainability_Head_Coach

It makes sense that Tesla will have hard sales in the Confederacy. Alabama passed legislation in 2012 that the word “sustainable” cannot be used in any state law. Kansas, Texas and N.C. have similar bills in committee for 2013.
So this is what happens when the worlds currently most sustainable car meets Neanderthals. Do rah…….

Sean Ferri

Are they trying to tell N. Carolinans what they can buy, or are they trying to tell Tesla where they can sell?

http://www.facebook.com/martin.schwartz.735 Martin Schwartz

Take the issue to court in every state that attempts to block sales.

donttrustdealers

I used to work for a Honda Dealer (13 years ago) as a Service Advisor. It was the worst Job I ever had, truly hated it. I had a salary of $250 every 2 weeks but got 6% of gross parts and labor sales. This pay method is really bad for customers since it encourages the service advisor to recommend repairs that are really needed. since I know how dealers operate, I don’t trust them, you shouldn’t either, they are not there to protect the customer, they are there to take advantage of the customer.